Area: Classified Balance Sheet and Income Statement structure/format for a Service Business

5. The following balances were taken from the accounting records of Singapore Cleaning Services Pty, Ltd. as at 30 th June.

Cash $6000

Accounts receivable 11 000

Supplies inventory 4500

Plant & equipment 78 000

Accumulated depreciation 7 000

Accounts payable 2000

Share capital 1 January 49 250

Dividends 6000

Fees revenue 189 000

Supplies expense 98 000

Selling expenses 8000

Financing expenses 1750

General & administrative expenses 12 000

Income tax expense 22 000

(a) Prepare an income statement for the business for the year ended 30 th June.

(b) Prepare a classified balance sheet for the business as at 30 th June.

(c) Calculate the current ratio and comment about the liquidity of this business. The average current ratio of cleaning service business is 2:1